PEPR mulls capital raising

Euronext-listed Prologis European Properties (PEPR) has said it is considering undertaking a EUR 60m capital raising to provide Europe's largest owner of modern distribution facilities with an additional financial cushion to help it weather the difficulties in the real estate market.

At the presentation of the results for the third quarter and the first nine months of the year, CEO Peter Cassells said: '2009 continues to be a testing time for the European commercial property sector. As such, in addition to our debt refinancing initiatives, we are continuing to review capital raising alternatives to provide PEPR with additional financial flexibility.

'The plans currently being evaluated include a possible offering of fully underwritten convertible preferred units to existing unit holders and a conversion to a SICAF structure, which would enable us to raise equity at a discount to net asset value. We intend to adopt the plan that will be most beneficial to our investors and expect to announce the plan later in the fourth quarter, once we have received the appropriate approvals.'

Profit for the third quarter was up 53% to EUR 26.1 mln. PEPR said 44% of EUR 1.3 bn debt maturities due in 2009/2010 had been refinanced or repaid. Some EUR 226 mln of secured bank loans were completed during the third quarter, and negotiations are in progress in relation to EUR 600 mln of new secured debt financings.

Cassells also said: 'Aside from maintaining portfolio performance through the downturn in the market, our immediate focus remains on deleveraging our balance sheet, by reducing or refinancing near-term debt maturities, and improving our future financial flexibility.

'To that end, I am pleased to report that we have successfully completed approximately EUR 274 mln of new or extended secured debt packages to date, sold EUR 190 mln of assets and repaid approximately EUR 459 mln of debt outstanding at the end of 2008.'